The Indian economy took 68 years to match the USD 2 trillion mark, and is most expected to double in the coming few years, offering massive opportunity to domestic investors, says Sunil Singhania, CIO-Equity-Investment at Reliance Mutual Fund (CNBC-TV18).
With monsoon playing major role in the performance of agri-focused companies, domestic companies could well 18-20 percent earnings growth and with goods & services tax (GST) in the offing will lead to shifting from organized to unorganized will lead to compounding growth in most of the domestic-driven sectors in the next 10 years, says Singhania. “Some of these companies might be 10x their size in the next 10-20 years. This happens to a lot of companies across the world. We are optimistic where we could see a growth rate of 18-20x year after year,” he further adds.
India Meteorological Department (IMD) in its first monsoon forecast expects rainfall to be 96 percent of long-period average with a 38 percent probability of a near-normal season after two successive years of drought before 2016.
Mr. Singhania says, “On the agri side there is some volatility based on monsoon, but thankfully the last year monsoon has been good and the forecast for this year monsoon is also robust. In the next 2-3 years, a lot of subsidies in the fertilizer space will go away which will benefit companies.”
Indian government is also looking forward towards enhancing rural income, raise agricultural productivity along with ensuring that India is self-sufficient, with promising future for fertilizer and agro-chemical sector.
“Global companies want to diversify their sourcing out of China as there is a huge clampdown of pollution as far as Chinese manufacturing is concerned. And, as far as knowledge based chemical space, India has an advantage over China. “We are also positive on the shift of physical savings to financial savings. Hence, companies which are engaged in asset management, life insurance, as well as NBFCs should also benefit.” said Singhania.